Valuation of Selected Company in Pharmaceutical Industry

Jie Lang

Master's thesis

Anotácia:

The main objective of this thesis is to estimate the probability distribution of market value at the end of 2021of Pfizer, a pharmaceutical company in New York, based on two-stage discount free cash flow to the firm model. The thesis is divided into two parts, the first part is methodology of the thesis, the second part is application part. Methodology part is focus on the description of valuation methodology, as known as the discount free cash flow to the firm model. Then, the next chapter is focused on the introduction of the Pfizer and the U.S. pharmaceutical industry and comparing the financial position in particular years. The most important part of the thesis is Chapter 4, which is the estimation of the probability distribution of the market value of Pfizer. The key point of the application part is the sensitivity analysis of the changes in the distribution of market value with the change in the growth rate of free cash flow, return on investment capital, and cost of capital.

Abstract:

The main objective of this thesis is to estimate the probability distribution of market value at the end of 2021of Pfizer, a pharmaceutical company in New York, based on two-stage discount free cash flow to the firm model. The thesis is divided into two parts, the first part is methodology of the thesis, the second part is application part. Methodology part is focus on the description of valuation methodology, as known as the discount free cash flow to the firm model. Then, the next chapter is focused on the introduction of the Pfizer and the U.S. pharmaceutical industry and comparing the financial position in particular years. The most important part of the thesis is Chapter 4, which is the estimation of the probability distribution of the market value of Pfizer. The key point of the application part is the sensitivity analysis of the changes in the distribution of market value with the change in the growth rate of free cash flow, return on investment capital, and cost of capital.

Kľúčové slová

Altman Z-score analysis, Discount free cash flow method, Financial analysis, Financial plan, Geometric Brownian Motion, Monte Carlo Simulation, Porter’s five force, Sales prediction, Sensitivity analysis, SWOT analysis

Keywords

Altman Z-score analysis, Discount free cash flow method, Financial analysis, Financial plan, Geometric Brownian Motion, Monte Carlo Simulation, Porter’s five force, Sales prediction, Sensitivity analysis, SWOT analysis

Jazyk práce: English

Datum vytvoření / odevzdání či podání práce: 22. 4. 2022

Obhajoba závěrečné práce

• Obhajoba proběhla 25. 5. 2022
• Vedúci: Petr Gurný
• Oponent: Miroslav Čulík

VSB – Technical University of Ostrava

Ekonomická fakulta

Master programme:
Finance